In Focus

In the long run...

Monday February 25, 2013 Dr Ganesh Nana

 

"In the long run we are all dead", is a much maligned phrase in the economic lexicon, made famous Keynes Keynes, J. M., A Tract on Monetary Reform, Macmillan, London, 1924. Perhaps even more scathing is the not-so-famous sentence that followed the more illustrious quote just mentioned.  In an equally wonderful turn of words, Keynes continued "Economists set themselves too easy, too useless a task if in tempestuous seasons they can only tell us that when the storm is long past the ocean is flat again."


To me, this reinforces that economists cannot, and should not, avoid the question of time in their analyses.  For one’s perspective of time is central to the identification of issues to be tackled, and potential solutions to be imposed.


So, let me put my prejudices front and centre.  I am a first generation New Zealander.  My parents recently became great-grand parents, so the family here is up to generation number three.  While I can’t talk for all the individual members of my family, I’m certain that looking several generations into the future my family will still be here.  For me, that was reinforced on the passing of my mother very recently, when decisions had to be made as to where we were going to take her.  And while it was entirely appropriate that we reunited her with her birthplace far away, it was non-negotiable that she also remained close to family, now, and for the future.

 

If you are here to stay then, I argue, the answers to many of the decisions we are now confronted with will be very different.  Indeed, the questions themselves may be very different.

And how does any of this relate to matters economic, or of business?  The bottom line for me is that all of the above reinforces to me that ‘we’ (as in the family) are here to stay.  And because I can say we are here to stay, this makes it relatively easy for me to take the long-term view of many decisions, and to value the benefits of my decisions even if those benefits did not arise until long into the distant horizon.


If you are here to stay then, I argue, the answers to many of the decisions we are now confronted with will be very different.  Indeed, the questions themselves may be very different.


There are many related matters here, but the perspective with which you approach certain decisions is relevant.  Take food and population.  The world’s human population recently topped seven billion.  The passing of this milestone reinforces the importance of discussion and debate around the sustainability of the use of resources – land, water, nutrients, energy, and the like.  And this is undoubtedly central to an economy, like New Zealand’s, that is based on the wise use of land and water resources.

 

We should be thinking carefully about consequences of our decisions for the next year, the next decade, the next generation, and the next century.

I use the word ‘wise’, advisedly.  The term wise, in my opinion, implies decisions that take into account impacts over lengths of time into the distant future.

 

I have heard (and it has been said to me directly (and, pointedly, in some contexts) by many Māori) that “Māori are here to stay, Māori are not going anywhere.”  Without doubt, these statements have resonated with me.  And I continue to ponder their implications.


They resonate with me because there is something innately significant about making decisions that have the potential to influence future generations.  Without doubt, influencing these decisions are far more exciting to me than being confronted with inane questions as to tomorrow’s OCR decision, or why did the NZ$ rise yesterday, or whether the recession is over or not ... and so on.


Because it is influencing decisions that have the potential to make a difference for future generations is what attracted me to economics in the first place.  This is what I define to be economics.  Because if you are here to stay, then critical decisions about resource use (how, where, when, and why) take on a significantly different complexion once you have decided to stay.  Rather than the archetypal coloniser whose sole goal is to wantonly pillage a land (and its accompanying resources) before departing, we should be thinking carefully about consequences of our decisions for the next year, the next decade, the next generation, and the next century.


And this is why I find great comfort in working with many Māori organisations and entrepreneurs over the past few years.  Of course, Māori have much to contribute to the development of New Zealand.  But, arguably, their critical contribution may well be in changing the time horizon over which business and economic decisions are made in Aotearoa.